When I filed my taxes for the first time, I didn’t have Turbotax or any other program to help me out. It was a very intimidating and scary process for me and I was constantly worried about messing up and having to pay a penalty to IRS. Filing for taxes is an easy job if you are aware of what you need to do. The following are some of the tips that you can use as a first time tax filer:
The first thing that you need to do is to organize all your files and documents. Have all these stored in one place, be it the forms, the receipts or other kinds of relevant documentation. By doing this you will be able to save a lot of time and also make the whole process more easy and convenient. Next, you should also check whether you qualify to file for free or not. If you have a W-2 along with very little bank interest then you would qualify.
Also, do not forget about filing for your state taxes with TurboTax 2015. When you have a tax filing program like TurboTax, you would be able to file for state taxes and federal taxes easily because all your information can be transferred automatically. Another top tip to keep in mind would be to file online using TurboTax 2015 instead of doing the process manually because the latter is a time consuming process and the scope for errors is also higher.
According to a recent Government Accountability Office report, the IRS continues to leave its vast computer systems without proper security. Private taxpayer data is vulnerable to hackers, fraudsters and former IRS employees. This GAO report tells of significant deficiencies relating to the financial reporting systems. Millions of Americans are rightfully concerned because they are required by law to file tax returns but worry about fraud.
The IRS must continue making improvements to taxpayer financial data controls. This news comes in the wake of a very unpleasant six weeks for taxpayers and the IRS. Taxpayers have entered this filing season with greater fears over fraud. TurboTax recently announced it was suspending tax return filings due to fraud.
Taxpayer distress became more severe when some learned that their tax return had been filed by someone else who received their refund. At first, it did not involve federal taxes, only state returns. The FBI began investigating returns filed using TurboTax. Those interviewed about this spoke of data being compromised and returns may have been filed on the basis of 2013 returns.
The report tells of easily compromised IRS passwords and outdated software having improper security functions. Worse yet, at times the IRS fails to delete access for employees who quit or have been fired.
Additionally, former employees of the IRS retain access to its data system when they should have been immediately cut off. A co-author of the report says that there is a plethora of taxpayer data that remains at risk for identity theft.
Taxpayers have no confidence in the credibility and security of the IRS especially after the Treasury Inspector General for Tax Administration stated that 1.6 million taxpayers had been affected by identity theft early in 2014. It was a fraction of that four years before. Electronic filing likely plays a role.
The GAO warns that gaining access to IRS files does not require much sophistication on the part of hackers. At the same time, it reports that some security weaknesses have been addressed, but more improvements must be made.
If you are using TurboTax 2015 to file your 2014 taxes, the software can save you a lot of time by transferring last year’s information into the current year, explains Frank Ellis, a tax specialist.
In an article in the Traverse City based Tax Preparation Examiner, Ellis explains in detail how users can simply use last year’s information and then submit their return to the IRS with the up to date information.
Users are also able to use TurboTax 2015 to get the largest possible refund, and Ellis tells you how to do this by explaining how to access many of last year’s details and entries that have been saved on your computer.
This saves time as you do not need to retype much of your information, and also ensures more accuracy. The convenience of TurboTax 2015 doesn’t stop there; the software also allows you to transfer important and relevant information from other files.
The fact that TurboTax 2015 looks for important documents and enters financial details automatically is one of the biggest appeals for most users filing their 2014 taxes. The software is designed to make the filing process as easy as possible, and to maximize the refund amount.
Ellis also points out the security and safety of the software – two things important to anyone dealing with personal financial information. Also pointed out are those all important little known deductions and credits, the many innovative tools of TurboTax 2015, and any important deadlines for filing.
Using a tax refund calculator is highly recommended during the entire process, to give users a fairly accurate idea of how much refund to expect. The entire tax filing process is easier and goes much more smoothly when you are able to make any necessary adjustments, based on your estimates of any tax refund.
Many users like to have some idea of their refund amount during the filing process, and the tax refund calculator allows you to be informed every step of the way. You can prepare more efficiently for the financial year when you are able to estimate the amount of your tax refund in advance.
H&R Block are experienced tax advisers who receive countless enquiries about reporting financial accounts held in foreign countries. Recent legislation requires all financial and banking institutions to report information concerning United States account holders. So, all tax filers who live in the states or abroad must be prepared to declare all bank accounts held. H&R Block would like to confirm the reports are due by June 30, and there are high penalties for those who fail to file.
This information should help people who invest in foreign banking institutions:
. Those who are expected to report foreign accounts
H&R Block wish to make it clear that people who have a foreign financial interest outside the USA exceeding $10,000 in any given calendar year are expected to file.
The taxation experts at H&R Block would like to remind tax-payers that the above information relates to US residents, corporations and partnerships and LLCs formed under United State laws.
. How to file a report of foreign bank and financial accounts (FBAR)
The taxation experts at H&R Block can help you to file a report. The FBAR will not be filed at the same time as your tax return; it will be prepared separately and electronically filed with the Federal Agency.
. The potential consequences for people who fail to file
Failing to file an FBAR can result in a criminal charge, a civil penalty or both, hence the staff at H&R Block would like to reiterate that those who fail to report foreign bank and financial accounts face heavy penalties.
The US Government has recognized Bitcoins which is good in a way but at the same time they have decided to view them as property, making them taxable. If they had decided that the virtual currency actually was a currency then a tax could not be placed on them when they gain in value. Some view this as making the currency legitimate, and a good thing.
The fact that they can now be taxed reduces the interest for some who see the risk in the fluctuations in value and don’t want to take on the additional tax risk. Spending them would trigger the taxation while holding onto the property would not create a taxable situation. An odd part of the IRS decision is that miners would need to count their Bitcoins as income.
Stability in the marketplace is what many hope for with a couple exchanges having financial trouble in recent months. This decision by the government should increase stability.
It will be interesting to see if there’s a form to claim Bitcoin income in the future or if exchanges will need to issue 1099 tax forms to miners at the end of each year.
Welcome to the January 14, 2014 edition of Tax Carnival Ecstasy. In this edition we start with an article from Bill Smith presenting the IRS Tax Adjustments made in 2014. John Schmoll has some Retirement Planning Tips for the Self-Employed. And Kurt at Mymoneycounselor.com looks into Tax ID Theft Awareness. Hope you enjoy all the articles, bookmark, share, tweet and like our carnival on Facebook.
Justin @ Root of Good presents 11 Tips to Finish the Year Strong posted at Root of Good, saying, “Don’t make a huge financial mistake by ignoring these 11 things you have to do before 2013 comes to a close. These tips include a number of deductions that are “use it or lose it” each tax year.”
John Schmoll presents Betterment Review: A New Investing Option to Consider posted at Frugal Rules, saying, “Investing in the stock market is vital to building wealth and with the variety of options available of where to invest it can be confusing. Choosing a good brokerage that has good offering and low fees can be a great way to help grow your retirement portfolio and get your investing on the right foot.”
John Schmoll presents Retirement Planning Tip for the Self-Employed: Don’t Make My Mistake posted at Frugal Rules, saying, “Retirement planning when you’re self-employed can be easily overlooked when you’re busy managing your business. However, this can cause a worse problem as you’re also losing out on a 401k match. With some appropriate planning and selection of the appropriate retirement vehicle you can set yourself up for success and grow your retirement portfolio at the same time. Just make sure that the option you select is the one that’ll benefit you from both a retirement and a taxation perspective.”
[email protected] presents Tax ID Theft Awareness posted at Money Counselor, saying, “Responding to explosive growth, the FTC has made January 13-17 Tax Identity Theft Awareness Week. What are the risks? What should you do if you’re victimized?”
That concludes this edition. Submit your blog article to the next edition of tax carnival ecstasy using our carnival submission form. Past posts and future hosts can be found on our blog carnival index page.